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Economic Update - June 2025

  • Writer: Luke Palmer
    Luke Palmer
  • Jun 10
  • 2 min read
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May was a month of volatility for global markets, with significant swings driven by geopolitical tensions and economic policy changes. Local markets, however, showed resilience, finishing the month 3.6% higher, partly due to Trump's 90-day pause on tariffs. US markets ended slightly lower, reflecting ongoing uncertainty.


Sector Performance

Australian Equities:

  • Communications (+6.5%): Defensive positions bolstered stocks like Telstra (ASX: TLS) and REA Group (ASX: REA).

  • Information Technology (+6.4%): Benefited from investor optimism.

  • Property (+6.4%): Rate-sensitive sectors gained from the likelihood of an RBA rate cut.

  • Consumer Discretionary (+6.1%): Similar to Property, this sector saw gains due to potential rate cuts.

  • Energy (-7.7%): Declined due to falling Brent oil prices, impacting major players like Woodside Energy (ASX: WDS) and Beach Energy (ASX: BPT).


Global Equities:

  • Developed Markets (-1.84%): Declined amid renewed US-China trade tensions.

  • Emerging Markets (-1.33%): Led lower by China, though Latin America outperformed.


Property:

  • Australian Real Estate Investment Trusts (A-REITs) (+6.35%): Reversed previous negative trends.

  • Global Real Estate (-0.73%): Fell amid global uncertainty.


Fixed Income:

  • US Treasury Yields: Fell due to heightened uncertainty from reciprocal tariffs.

  • Australian Bond Yields: Dropped as the RBA held firm on the cash rate.


Positive and Negative Influences on Portfolios

Positive Influences:

  • Communications: Defensive positions and strong performance from major companies.

  • Information Technology: Investor optimism and potential rate cuts.

  • Property and Consumer Discretionary: Rate cut expectations.


Negative Influences:

  • Energy: Declining oil prices.

  • Global Equities: Trade tensions and economic policy uncertainty.


Focus of Financial Markets Going Forward

The focus of financial markets is expected to be on policy uncertainty and fiscal stimulus. Trump's signature tax bill and ongoing tariff negotiations will play a crucial role in shaping market sentiment. Investors should keep an eye on bond market reactions and retail sales data for early indicators of economic direction.


Key Factors Impacting Financial Markets

  • Policy Uncertainty: High levels of unpredictability in US fiscal and trade policies.

  • Fiscal Stimulus: Trump's tax bill and its potential impact on growth.

  • Bond Market Reactions: Rising yields and deficit concerns.


The coming months will be crucial for navigating the complexities of the financial markets. If you would like to discuss further, please don't hesitate to contact us.


Thanks to our research partners at Lonsec for assisting with the preparation of this Economic Update.


 
 
 

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This information is of a general nature only and neither represents nor is intended to be specific advice on any particular matter. We strongly suggest that no person should act specifically on the basis of the information contained herein but should seek appropriated professional advice based upon their own personal circumstances. Although we consider the sources for this material reliable, no warranty is given and no liability is accepted for any statement or opinion or for any error or omission. Past performance is not a reliable indicator of future performance. Please refer to the Product Disclosure Statement (PDS) before investing in any products mentioned in this communication. This information is current as at the date of this document.

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